Xenophobia: Poor South Africans have a point

2015-04-23 20:42

Brad Cibane

In 2013 I moved from France to Braamfontein, Johannesburg. I noticed, without much effort, that an overwhelming majority of the maintenance and security employees in my building were immigrants. Oftentimes I would invite the security guards to my place for dinner. It was clear from our conversations that they had overcome enormous hardship to get into South Africa. Like everyone else, they were in Johannesburg searching for a better life.

One evening, when the guards rotated, I met for the first time a South African fellow with a thick Mpondo accent. I stopped to ask him about his colleagues. He was visibly annoyed and his response rather dismissive: “Those people will not be on duty until next week.”

Startled and intrigued by his annoyance, I waxed him with a full pack of cigarettes (I was trying to quit anyway), and struck up a conversation.

He told me that he has no problem with foreigners; except, “they” were hurting his livelihood. His employer insisted that immigrants were willing to work for less and slashed his monthly wages from R2000 to R1000. Also, he worked on a rotation schedule, for three instead of four weeks at R250 per week or R750 per month. R750 [about $60] was not enough to cover transport to Alexandra, let alone feed his family.

He complained that, whereas he was denied an education by the apartheid government, his colleagues (mostly Nigerian) had advanced diplomas or degrees. He could not understand why they did not search for “proper jobs”.

Having lived as an immigrant in France, I was unsympathetic to his xenophobic tirade. However, his anger made sense. If the claims were true, then both he and the immigrants were victims of corporate abuse. Also, he was right; most of the immigrants I interacted with had completed A-levels. A few of them held tertiary diplomas. One fellow was a SAQA-accredited medical technician, except he could not work because of an expired visa.

This story is the other side of the coin, which has largely been ignored by the discourse on xenophobia. (You can read a first-person story here. Also, read a nuanced discussion of xenophobic violence here.) To start a discussion, we must seriously conceptualise the issues beginning with the context.

First, various sources estimate that there are between 6 million and 8 million undocumented immigrants in South Africa. Some sources push the number up to 10 million. To put these figures into perspective, consider that South Africa has a population of roughly 50 million people. If we take the ballpark figure of 6 million, then undocumented immigrants would constitute north of 12 percent of the population. It is undoubtedly a problem that 12 percent of the population is undocumented.

Second, and perhaps the most contentious bit: our immigration problem has significant distributional consequences. The costs of immigration are borne disproportionately by the poor and the working class. This reason is easy to understand. Undocumented immigrants flock into the informal economy, irrespective of their level of skill. Further, because of their “undocumented” status, they do not enjoy collective bargaining rights and they do not benefit from welfare programs.

Their "undocumented" status fences the costs in the working and under classes, who must share their diminishing slice for immigrants to survive. The middle and upper classes perhaps suffer from small inconveniences but remain largely unaffected. We should open up the playing field, which would shift some of the burden to the middle class. Skilled undocumented immigrants should not be competing with hawkers and security guards. They should compete with skilled South Africans. To be sure, let us look at the numbers. First, consider that South Africa has a serious problem with poverty. According to some estimates, 31.3 percent of the population lives below the breadline. Second, a large segment of the population is either unemployed or unemployable. In the second quarter of 2014 joblessness in South Africa reached 25.5 percent, the highest level since 2008. The youth is particularly affected. As I recently pointed out on Daily Maverick, 63 percent of the youth is unemployed. According to Brookings, Roughly 30 percent of male youth and 36 percent of female youth are disconnected from both the labour market and opportunities that promote future employability. Of course, some would disagree with the analysis. Consider Lovelyn Chidinma Nwadeyi's cringe-worthy response that, “South Africans who embibe these arguments are lazy. There is a disgusting entitlement that is attached to this notion that jobs can be stolen. This implies that there are jobs waiting for you – of which there are none.” She continues:

I can bet you that there is not up to 10 percent of South Africans who would be willing to do the menial and embarrassing work my parents and other foreigners did for as long as they did it and for as little as they did it were you to ask them today. So it annoys me, to the deepest part of my being when I see a South African open their mouth and cry “foul” against innocent foreigners.

Her solution is that South Africans must “[p]ick up a bucket and start washing cars. Put on your shoes and walk through your streets, sell tomatoes, eggs and tea – anything people eat, they will buy. Or pick up a book, hustle your way into university, work for a scholarship and get yourself an education.”

There is an obvious flaw in Nwadeyi’s (somewhat lazy and very populist) argument. Suppose, for example, that there are 50 South Africans selling fruits and veggies along the pavement on West Street in Durban. If 50 new immigrants open fruit and veg stalls on the same street, then commonsense dictates that the revenue of the existing stalls would drop at least by half. This is a general problem with illegal immigration -- undocumented immigrants increase the labour supply in the informal economy.

After Ghana’s independence in 1957, people from countries in the region migrated in droves to Ghana. In the late 1960s Ghana was facing severe drought and economic problems. Immigrants were blamed for deteriorating conditions. In 1969, the Busia government enacted the Aliens Compliance Order, which decreed that all undocumented migrants had to leave the country within two weeks. The migrant population dropped from 12.2 percent to 6.6 percent. Nigerians were the most affected.

Nigeria soon returned the favour. The 1979 Protocol to ECOWAS liberalised the immigration laws in West Africa. Ghanaians, attracted by the flourishing oil economy, flocked into Nigeria. However, the fall of oil prices in the early 1980s plunged Nigeria into economic hardship. In January 1983, the Nigerian government declared that all undocumented migrants had to leave by the end of the month. Approximately 1.2 million Ghanaian migrants were forced to leave Nigeria.

None of the arguments outlined above justifies attacking and killing immigrants. The analysis points to a real problem that cannot be solved with slogans. Yes, the mass rallies and sloganeering are absolutely necessary to prevent violence and to protect human rights. However, the worst possible response to the immigration crisis would be to pretend that it does not exist. Stopping the violence is only a short-term solution. We need long-run fixes to ensure that xenophobic violence does not rear its ugly head again.

Poor people -- at least those who are talking -- have a point. Immigration is a problem and they are footing the bill. The next step in the analysis is asking what is be done? Neither deporting undocumented immigrants en masse nor manning the border with tanks will not work! Attacking and harming immigrants is sheer criminality. I propose the following responses.

(NOTE. To be absolutely clear and prevent abuse of my argument, I am not saying immigrants are stealing jobs. I am merely saying that illegal immigration results in a net welfare loss.[i] This is caused by: (i) competition in the informal economy[ii] and (ii) exploitative practices by employers.[iii] Compare this to the general consensus that legal migration has a net gain.[iv] I am also not suggesting that undocumented immigrants are a burden on the welfare state. My suggestion proper is that we must make it easier for undocumented immigrants to get documents and we must regulated the informal economy.)

First, we must reform out immigration laws to make it easier for skilled immigrants to participate in the formal economy. The reforms must target the insurmountable redtape associated with work visas. The government must consider pardoning, and thus documenting, people who are in the country illegally. Legalizing their status will expand their economic prospects and perhaps ease pressure on the poor.

Second, we must implement light-touch regulation of the informal economy. The government must enact minimum standards and codes of practice for the informal sector generally, to prevent the abuses outlined above. The labour reforms must include a state-run watchdog within the Department of Labour to combat abuse. The collective bargaining model works only when people are capable of forming and joining unions.

Third, we must grow the pie for the working class. We can do that in two ways. One, we must provide skills training and education opportunities to disaffected youths. Two, the government must expand state capitalism through infrastructure projects and other forms of public spending. We cannot rely on market-driven growth. It is taking too long.

Fourth, government must streamline the process of incubating and funding small businesses. The scattered business development agencies must be incorporated into a single agency -- perhaps a state-run Development Bank -- to ensure efficiency and to prevent fragmentation and arbitrage.

Finally, we must coordinate with other African countries to improve democracy. The level of migration into South Africa is indicative of serious governance and economic problems north of the Limpopo River. We need to nub the source of these problems. Even a prosperous South African cannot accommodate the whole African continent.

Another negative causal impact of immigration is the replacement of South African native labour with migrant labour. Immigrants can worsen natives’ welfare by displacing them in the labour market. Labour immigrants who hold skills similar to those of natives compete for jobs and may displace them in the process.

South African authorities are attempting to limit inflows of illegal immigrants. Evidence for the United States presented in Dixon et al (2011) suggests that a policy-induced reduction in labour supply from illegal immigrants generates a welfare loss for legal residents. I use a similar labour market mechanism within a dynamic CGE model for South Africa, but take into consideration a number of well-known facts about the local economy. With high unemployment rates among low skilled workers and a legal minimum wage in place, I find a net gain in employment and welfare for legal residents in South Africa when reducing the inflow of illegal immigrants.

From the findings of the Masungulo Project it can be deduced that illegal immigrants would be competing with low-skilled South Africans in the job market. Such a deduction would find support in a study conducted by the National Labour and Economic Development Institute (NALEDI), a think-tank for the Congress of South African Trade Unions (COSATU). The study documented the presence of illegal aliens in the various sectors of the economy. In addition, it revealed that many workers feel that the presence of illegal foreign workers has a depressing effect on wages as a result of their accepting to work for long hours for low wages and their resistance to unionisation. This, union officials argue, contributes to local people having decreased access to employment and giving rise to resentment towards illegal immigrants that is then expressed in xenophobia.

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